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02 The S-Curve Adoption Model 2018

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02 The S-Curve Adoption Model 2018

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02 The S-Curve Adoption Model 2018

  1. 1. 1 Please discontinue use of cell phone and turn off ringer The S-Curve Adoption Model Innovation & IT Management
  2. 2. 2 Types of innovations Based on the extent of technological novelty that embodies a new product, it is possible to divide innovation into two main categories: Incremental Innovations vs Radical Innovations Technological noveltyLow High Incremental Innovations Radical Innovations Small but important improvements in a product, process, or service. Relatively common and are created within the company. Help companies maintain a competitive position. Usually based on an invention. They change or create industries. Typically rare and typically start outside the company. Alaa Al-Agamawi, A.B. (2009). CS443 Course Introduction to Entreptreneurship, Chapter Three: Critical Factors in Managing Technology, https://www.slideshare.net/magamawi/essential-of-technology-entrep-innovation-chapter-three-critical-factors-in- managing-technology, last accessed Aug 15, 2017.
  3. 3. 3 Alaa Al-Agamawi, A.B. (2009). CS443 Course Introduction to Entreptreneurship, Chapter Three: Critical Factors in Managing Technology, https://www.slideshare.net/magamawi/essential-of-technology-entrep-innovation-chapter-three-critical-factors-in- managing-technology, last accessed Aug 15, 2017. Types of innovations Examples of radical innovations : The invention of the transistor, which was invented by Bell Laboratories, triggered phenomenal advances in the electronic and the computer industries. Examples of radical innovations : The invention of the transistor, which was invented by Bell Laboratories, triggered phenomenal advances in the electronic and the computer industries. The development of electrophotography (later renamed xerography) by Chester Floyd Carlson was the starting point of radical innovations in the photocopying industry and created a market of more than $20 billion.
  4. 4. 4 Types of innovations Based on the extent of technological novelty that embodies a new product, it is possible to divide innovation into two main categories: Incremental Innovations vs Radical Innovations Technological noveltyLow High Incremental Innovations Radical Innovations Small but important improvements in a product, process, or service. Relatively common and are created within the company. Help companies maintain a competitive position. Usually based on an invention. They change or create industries. Typically rare and typically start outside the company. Alaa Al-Agamawi, A.B. (2009). CS443 Course Introduction to Entreptreneurship, Chapter Three: Critical Factors in Managing Technology, https://www.slideshare.net/magamawi/essential-of-technology-entrep-innovation-chapter-three-critical-factors-in- managing-technology, last accessed Aug 15, 2017.
  5. 5. 5 Based on the extent of technological novelty that embodies a new product, it is possible to divide innovation into two main categories: Incremental Innovations vs Radical Innovations Based on whether new technologies (or even existing technologies) destroy core companies in an existing market, it is possible to further divide innovation into two more main categories: Sustaining Innovations vs Disruptive Innovations1 1. Christensen, C.M. (1997). The Innovator’s Dilemma”, Harvard Business School Press . Propensity to destroy marketsLow High Sustaining Innovations Disruptive Innovations Types of innovations
  6. 6. 6 Introduction First introduced in 1903 by Gabriel Tarde, the S- Curve is an indication of the speed (rate) of adoption of an innovation. Early adopters Diffusion Late adopters Rogers, E.M. (1995). Diffusion of Innovations, 4th Ed. (p. 11), New York: Free Press. Sometimes called the Diffusion Curve, the S-Curve is also used to also depict diffusion, and even markets:
  7. 7. 7Corporate Angels (2008). Corporate America - Designed to Fail? (Part 1), October 26, http://www.corpangels.com/blogs/?p=21, last accessed Dec 27, 2012. Introduction Also verified for: Video Games MP3 Player Air Travel HDTV Color TV Cell Phone Social Media Credit Cards Smartphone Fridge Microwave Tablet Digital Camera etc.
  8. 8. 8Staniford, S. (2010). Technology Adoption in Hard Times, June 18, http://earlywarn.blogspot.com/2010/06/technology-adoption-in- hard-times.html, last accessed Dec 27, 2012. Introduction
  9. 9. 9 75 16 7 6,5 4,6 2,2 3,4 2,4 1,3 Telephone Mobile phone WWW iTunes Facebook Apple App Store WhatsApp Instagram Candy Crash 0 10 20 30 40 50 60 70 80 The number of years technologies take to reach 100 million people worldwide. The number of years technologies take to reach 100 million people worldwide. Dreischmeier, R., Close, K., and Trichet, P. (2015). The Digital Imperative, The Boston Consulting Group, http://image- src.bcg.com/Images/The_Digital_Imperative_Mar_2015_tcm55-80124.pdf, last accessed Aug 18, 2017. Introduction
  10. 10. 10 Thus an S-Curve describes the evolution of a so-called Main Parameter of Value (MPV) along a time axis. Nähler, H.Th. and Gronauer, B. (Oct 2015). From a Toolbox to a Way of Thinking – An integrated View on TRIZ, Conference: TRIZ Future Conference 2015, Berlin (ETRIA), https://www.researchgate.net/publication/287646024_From_a_Toolbox_to_a_Way_of_Thinking_-_An_integrated_View_on_TRIZ, last accessed Aug 14, 2017. Introduction MainParameterofValue(MPV)MainParameterofValue(MPV) Time
  11. 11. 11 Thus an S-Curve describes the evolution of a so-called Main Parameter of Value (MPV) along a time axis. An MPV is a key attribute or outcome of a product or service that is important to the purchase decision process1. Basically, the MPV represents a characteristic for which the customer is willing to pay money. 1. Litvin, S. (2011). Main Parameter of Value: TRIZ-based Tool Connecting Business Challenges to Technical Problems in Product/Process Innovation, Keynote to the 7th Japan TRIZ Symposium September 9, 2011, Yokohama, Japan From a Toolbox to a Way of Thinking – An integrated View on TRIZ (PDF Download Available), https://www.researchgate.net/publication/287646024_From_a_Toolbox_to_a_Way_of_Thinking_-_An_integrated_View_on_TRIZ, last accessed Aug 14, 2017. Nähler, H.Th. and Gronauer, B. (Oct 2015). From a Toolbox to a Way of Thinking – An integrated View on TRIZ, Conference: TRIZ Future Conference 2015, Berlin (ETRIA), https://www.researchgate.net/publication/287646024_From_a_Toolbox_to_a_Way_of_Thinking_-_An_integrated_View_on_TRIZ, last accessed Aug 14, 2017. Introduction
  12. 12. 12 Time AdoptionRate Introduction
  13. 13. 13 Performance Time Introduction
  14. 14. 14 MainParameterofValue(MPV) Time Introduction
  15. 15. 15 Time or Money or Effort Introduction MainParameterofValue(MPV)
  16. 16. 16 A B C Time or Money or Effort Performance 1:35Alanis Business Academy (Feb 3, 2014). Episode 154- Innovation and the S-Curve- Why More Money Doesn't Always Lead to Greater Improvements.mp4, Alanis Business Academy, https://www.youtube.com/watch?v=Gs9_AnWrPGs, last accessed Aug 14, 2017. Introduction
  17. 17. 17 The S-Curve of Technological Progress
  18. 18. 18 18 The S-Curve of Technological Progress The majority of PC users rely on a few applications – word processing, spreadsheets, e-mail, and Web browsing. These applications have been technologically mature for years; they require only a fraction of the computing power provided by today’s microprocessors.
  19. 19. 19 Time TechnologicalPerformance The S-Curve of Technological Progress Embryonic Growth Maturity Aging Physical limit
  20. 20. 20 Time TechnologicalPerformance The S-Curve of Technological Progress Embryonic Growth Maturity Aging Physical limit New Invention Period Technology Improvement Period Mature Technology Period Source: Khalil, T.M. (2005). Customized Management of Technology, McGraw-Hill.
  21. 21. 21 Time TechnologicalPerformance New Invention Period Technology Improvement Period Mature Technology Period Physical limit The S-Curve of Technological Progress
  22. 22. 22 The S-Curve of Technological Progress
  23. 23. 23 Agamawi, M. (Oct 4, 2012). From Idea to Product - Part One, Couse available on Udemy, https://www.slideshare.net/magamawi/technology-commercialization-workshop-part-2, last accessed Aug 14, 2017. The New Invention Period is characterized by The appearance of a new system/technology and slowly begins development - Small initial growth. Experimentation whereby initial bugs and defects are worked out of the system/technology. The S-Curve of Technological Progress
  24. 24. 24 Note that: For the first adopter of the telephone about 120 years ago, the innovation had zero utility. Rogers, E.M., Singhal, A. and Quinlan, M.M. (2008). Diffusion of Innovations, A chapter in Don Stacks and Michael Salwen (Eds). An integrated approach to communication theory and research. New York: Routledge (also see http://utminers.utep.edu/asinghal/Book%20Chapters/Rogers-Singhal-Quinlan-2009-DOI-Stack%20and%20Salwen.pdf). The S-Curve of Technological Progress Note that: For the first adopter of the telephone about 120 years ago, the innovation had zero utility. When a second adoption occurred, the innovation became more valuable to both parties. Note that: For the first adopter of the telephone about 120 years ago, the innovation had zero utility. When a second adoption occurred, the innovation became more valuable to both parties. And so it went until gradually there were so many adopters that an individual could assume that anyone he or she might wish to call would also have a telephone.
  25. 25. 25 Agamawi, M. (Oct 4, 2012). From Idea to Product - Part One, Couse available on Udemy, https://www.slideshare.net/magamawi/technology-commercialization-workshop-part-2, last accessed Aug 14, 2017. The Technology Improvement Period (also known as the Growth Stage) is characterized by Rapid and sustained growth. Society/markets recognize the value of the system/technology. The S-Curve of Technological Progress
  26. 26. 26 Agamawi, M. (Oct 4, 2012). From Idea to Product - Part One, Couse available on Udemy, https://www.slideshare.net/magamawi/technology-commercialization-workshop-part-2, last accessed Aug 14, 2017. In the Mature Technology Period The system/technology becomes vulnerable to obsolescence and/or to substitution by a new (better) system/technology. Starts when the physical limit is approached. The resources of the original concept are mostly exhausted. The S-Curve of Technological Progress
  27. 27. 27 Worldwide PC sales in the last 4 decades. The S-Curve of Technological Progress Data from: Reimer, J. (Feb 17, 2012). Personal Computer Market Share: 1975-2004, http://www.retrocomputing.net/info/siti/total_share.html, last accessed Aug 15, 2017, completed with data from Wikipedia (July 24, 2017). Market share of personal computer vendors, https://en.wikipedia.org/wiki/Market_share_of_personal_computer_vendors, 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 0 50000 100000 150000 200000 250000 300000 350000 400000 Worldwide PC sales in the last 4 decades.
  28. 28. 28 The S-Curve of Technological Progress Ojomo, E. (May 24, 2017). Why development organizations should be more like Netflix and less like Blockbuster, https://www.christenseninstitute.org/blog/development-organizations-like-netflix-less-like-blockbuster/, last accessed Oct 10, 2017.
  29. 29. 29Ojomo, E. (May 24, 2017). Why development organizations should be more like Netflix and less like Blockbuster, https://www.christenseninstitute.org/blog/development-organizations-like-netflix-less-like-blockbuster/, last accessed Oct 10, 2017. The S-Curve of Technological Progress
  30. 30. 30 A direct consequence is that the cost of the product is reduced with time, as market penetration increases through the S-curve. Performance Time Innovation Growth Maturity The S-Curve of Technological Progress
  31. 31. 31 A direct consequence is that the cost of the product is reduced with time, as market penetration increases through the S-curve. Examples: Cell phones and cell phone service. The drastic cost reduction of unlimited local and long-distance service for landline phones as well as cell phones. The cost of color television. The cost of PCs. etc. The S-Curve of Technological Progress
  32. 32. 32 Example: The adoption curve for color TV in the US (and elsewhere): Jansson, A. (Sept 20, 2016).Paradigm shift in the energy sector, https://www.linkedin.com/pulse/paradigm-shift-energy-sector- alexander-jansson, last accessed Aug 14, 2017. The S-Curve of Technological Progress
  33. 33. 33 Oftentimes, profits lag revenues in the S-curves. It is not until late in the growth phase that the product becomes profitable. High costs for development, marketing (including heavy advertising and consumer education), and distribution must be recovered. Finkelstein, R. (n.d.). MANAGEMENT OF TECHNOLOGY CHAPTER 1: INTRODUCTION, presentation based on: Customized Management of Technology by Tarek Khalil (With Additional Information By R. Finkelstein), p. 95, http://www.robotictechnologyinc.com/images/upload/file/Presentation%20Technology%20Management3.pdf, last accessed Aug 14, Oftentimes, profits lag revenues in the S-curves. It is not until late in the growth phase that the product becomes profitable. High costs for development, marketing (including heavy advertising and consumer education), and distribution must be recovered. Example: Amazon. The S-Curve of Technological Progress
  34. 34. 34Speculator (Oct 23, 2017). Facebook post, https://www.facebook.com/cryptospeculator/, last accessed Oct 23, 2017. Oftentimes, profits lag revenues in the S-curves. It is not until late in the growth phase that the product becomes profitable. High costs for development, marketing (including heavy advertising and consumer education), and distribution must be recovered. Example: Amazon. The S-Curve of Technological Progress
  35. 35. 35 The S-Curve of Technological Progress Russell, G. (Jan 4, 2017). Amazon: The Case For A $1 Trillion Market Cap & Debunking The No Profit Misconception, https://seekingalpha.com/article/4034288-amazon-case-1-trillion-market-cap-and-debunking-profit-misconception, last accessed Aug 15, 2017.
  36. 36. 36 The S-Curve of Technological Progress Russell, G. (Jan 4, 2017). Amazon: The Case For A $1 Trillion Market Cap & Debunking The No Profit Misconception, https://seekingalpha.com/article/4034288-amazon-case-1-trillion-market-cap-and-debunking-profit-misconception, last accessed Aug 15, 2017.
  37. 37. 37 The S-Curve of Technological Progress Russell, G. (Jan 4, 2017). Amazon: The Case For A $1 Trillion Market Cap & Debunking The No Profit Misconception, https://seekingalpha.com/article/4034288-amazon-case-1-trillion-market-cap-and-debunking-profit-misconception, last accessed Aug 15, 2017.
  38. 38. 38 Performance Time At any given time, there might be several competing technologies overlapping in the marketplace. The S-Curve of Technological Progress
  39. 39. 39 Performance Time At any given time, there might be several competing technologies overlapping in the marketplace. Existing technology New technology Period 1 Period 2 Period 3 Period 1 Period 2 Period 3 The S-Curve of Technological Progress
  40. 40. 40 Performance Time At any given time, there might be several competing technologies overlapping in the marketplace. Existing technology New technology Newer technology The S-Curve of Technological Progress
  41. 41. 41 Bandwidth(kbps) Time Example 1: NMT 1G GSM 1G UMTS 3G UMTS 4G Neumann, R. (Mar 26, 2013). Innovation and the S-Curve, Presentation from the 2013 LiFT Conference: Driving Innovation-based Growth, https://www.slideshare.net/wright4/double-scurve-model-of-growth?from_action=save, last accessed Aug 14, 2017. 9.6 14.4 2000 1981 1992 2003 20102005 The S-Curve of Technological Progress Universal Mobile Telecommunications System Nordic Mobile Telephone
  42. 42. 42 Efficiency Time Example 2: Paraffin candle Edison’s lamp Sodium lamp Mercury lamp Slocum, M.S. and Lundberg, C.O. (n.d.). Tools to Forecast Technology Innovations, https://triz-journal.com/innovation-tools- tactics/breakthroughdisruptive-innovation-tools/tools-forecast-technology-innovations/, last accessed Oct- 7, 2017. Fluorescent lamp The S-Curve of Technological Progress Efficiency(Lumensperwatt)
  43. 43. 43 Computingpower Time Example 3: Mechanical relay Vacuum tubes Transistors Integrated circuits Microprocessors The S-Curve of Technological Progress
  44. 44. 44 Computingpower Time Example 4: The S-Curve of Technological Progress Windows 1.0 Windows 3.0 Windows 3.1 Windows 3.2 Windows for Workgroups Windows 95 Windows 98 Millenium Windows 2000
  45. 45. 45 Computingpower Time Example 4: The S-Curve of Technological Progress Windows 2000
  46. 46. 46 Computingpower Time Example 4: The S-Curve of Technological Progress XP Vista Windows 7 Windows 8 Windows 8.1 Windows 10 Windows 9
  47. 47. 47 Performance Time When and how does disruptive innovation occur? Existing technology New technology The S-Curve of Technological Progress
  48. 48. 48 Performance Time When and how does disruptive innovation occur? The limit of value Old technology Discontinuity New technology The S-Curve & Disruptive Innovations
  49. 49. 49 Performance Time When and how does disruptive innovation occur? The limit of value Old technology Discontinuity New technology Disruption innovation The S-Curve & Disruptive Innovations
  50. 50. 50 Performance Time When and how does disruptive innovation occur? Performance that customers can use Disruption innovation The S-Curve & Disruptive Innovations
  51. 51. 51 Disruptive Technologies - Definitions The concept of disruptive technology was first introduced in 1995 by Clayton M. Christensen in “The Innovator’s Dilemma”. The term disruptive technology has been widely used as a synonym of disruptive innovation, but the latter is now preferred, because market disruption has been found to be a function usually not of technology itself but rather of its changing application. The term disruptive technology has been widely used as a synonym of disruptive innovation, but the latter is now preferred, because market disruption has been found to be a function usually not of technology itself but rather of its changing application. Sustaining innovations are typically innovations in technology, whereas disruptive innovations change entire markets.
  52. 52. 52Christensen, C.M. and Raynor, M.E. (2003). The Innovator's Solution: Creating and Sustaining Successful Growth. Boston: Harvard Business School Press. Disruption has been more about getting lucky than being good. Products: Worse is better. Especially in the IT industry! Disruptive Technologies - Examples
  53. 53. 53 1979 - Visicalc 1987 - Excel 1.0 1982 - Multiplan 1989 - Quattro Pro 1983 - Lotus 1-2-3 The IT Industry Visicalc alone, was responsible for the sale of an estimated 200.000/300.000 machines!
  54. 54. 54 1978 – WordStar 1983 – Word 1.0 1979 – WordPerfect 1988 – Ami Pro (Word Pro) 1981 - EasyWriter 1983 - PC-Write The IT Industry
  55. 55. 55 The IT Industry
  56. 56. 56 The IT Industry
  57. 57. 57 InfoWorld 9 Sep 1985 The IT Industry
  58. 58. 58 The IT Industry
  59. 59. 59 RIP The IT Industry
  60. 60. 60See Booker, E. (1995). Netscape keeps on rolling, Computerworld, Vol.29, No.10, March 6, p. 32. The IT Industry: The Browsers War
  61. 61. 61 Jim Clark Marc Andreesen The IT Industry: The Browsers War
  62. 62. 62Cooper, S. (2014). Whatever happened to Netscape? https://www.engadget.com/2014/05/10/history-of-netscape/, last accessed Dec. 17, 2016. Netscape Internet Explorer The IT Industry: The Browsers War
  63. 63. 63Cooper, S. (2014). Whatever happened to Netscape? https://www.engadget.com/2014/05/10/history-of-netscape/, last accessed Dec. 17, 2016. Netscape Internet Explorer The IT Industry: The Browsers War When Microsoft embraced the Internet, the company created a new division with 2,500 employees. In less than a year this division produced three releases of the Internet Explorer.
  64. 64. 64Cooper, S. (2014). Whatever happened to Netscape? https://www.engadget.com/2014/05/10/history-of-netscape/, last accessed Dec. 17, 2016. Netscape Internet Explorer The IT Industry: The Browsers War
  65. 65. 65 The IT Industry: The Browsers War
  66. 66. 66 The IT Industry: The Social Networks War
  67. 67. 67Daniel P. (Feb 10, 2017). Thanks to 7 Plus, Apple topped Q4 smartphone sales, can you guess with which other iPhone it beat Samsung? https://www.phonearena.com/news/Thanks-to-7-Plus-Apple-topped-Q4-smartphone-sales-can-you-guess-with-which- More recently
  68. 68. 68 1985 – Windows 1.0 1987 – OS/2 1990 – Windows 3.0 1987 – Windows 2.0 The IT Industry 1991 – BeOS
  69. 69. 69 The IT Industry
  70. 70. 70Data from: Reimer, J. (Feb 17, 2012). Personal Computer Market Share: 1975-2004, http://www.retrocomputing.net/info/siti/total_share.html, last accessed Aug 15, 2017. 1980 1981 1982 1983 0 1 000 2 000 3 000 4 000 5 000 Legend Apple Il Macintosh Arniga ATARI 400/800 Atari ST Commodore 64 TRS-80 NeXT Other IBM PC + Clones IBM missed the initial phase of PC development. It started by following PC leaders. The IT Industry
  71. 71. 71 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 0 5 000 10 000 15 000 20 000 25 000 Legend Apple Il Macintosh Arniga ATARI 400/800 Atari ST Commodore 64 TRS-80 NeXT Other IBM PC + Clones Data from: Reimer, J. (Feb 17, 2012). Personal Computer Market Share: 1975-2004, http://www.retrocomputing.net/info/siti/total_share.html, last accessed Aug 15, 2017. IBM missed the initial phase of PC development. It started by following PC leaders. The IT Industry
  72. 72. 72Data from: Reimer, J. (Feb 17, 2012). Personal Computer Market Share: 1975-2004, http://www.retrocomputing.net/info/siti/total_share.html, last accessed Aug 15, 2017. IBM missed the initial phase of PC development. It started by following PC leaders. 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 0 20 000 40 000 60 000 80 000 100 000 120 000 Legend Apple Il Macintosh Arniga ATARI 400/800 Atari ST Commodore 64 TRS-80 NeXT Other IBM PC + Clones IBM missed the initial phase of PC development. It started by following PC leaders. It eventually dominated the industry and set product standards It even inspired the “PC” designation for individual computers. The IT Industry
  73. 73. 73 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 0 50 000 100 000 150 000 200 000 Legend Apple Il Macintosh Arniga ATARI 400/800 Atari ST Commodore 64 TRS-80 NeXT Other IBM PC + Clones Data from: Reimer, J. (Feb 17, 2012). Personal Computer Market Share: 1975-2004, http://www.retrocomputing.net/info/siti/total_share.html, last accessed Aug 15, 2017. IBM missed the initial phase of PC development. It started by following PC leaders. It eventually dominated the industry and set product standards It even inspired the “PC” designation for individual computers. Yet, it did not own or control basic PC technology; neither hardware (Intel) nor software (Microsoft). The IT Industry
  74. 74. 74 The IT Industry The “IBM Compatibles” (or Clones)
  75. 75. 75 The IT Industry
  76. 76. 76 Lotus was once the Google of its day. Its core product, Lotus 1-2-3, was the killer app of that time. 1983 - Lotus 1-2-3 1987 - Excel 1.0 Lotus was once the Google of its day. Its core product, Lotus 1-2-3, was the killer app of that time. Ultimately, Lotus saw that Microsoft was developing Windows and a product called Excel. The Lotus team saw the incoming threat of Windows, but thought if they ignored Windows and did not build apps for it, everyone else would do the same. 1983 - Lotus 1-2-3 Disruptive Technologies - Lotus Diamandis, P.H. (n.d.).Lessons from Kodak, http://www.diamandis.com/blog/lessons-from- kodak?utm_content=buffer84fe6&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer, last accessed June 14, 2016.
  77. 77. 77 1987 - Excel 1.0 However, their biggest customers - Procter & Gamble, Exxon and Shell, among others -- were leaving Lotus and going to Windows and Excel. Lotus’ strategy did not work. They could not keep up. Complete disruption. Lotus was ultimately acquired by IBM in 1995 and no longer has a product line today. 1983 - Lotus 1-2-3 Diamandis, P.H. (n.d.).Lessons from Kodak, http://www.diamandis.com/blog/lessons-from- kodak?utm_content=buffer84fe6&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer, last accessed June 14, 2016. Disruptive Technologies - Lotus
  78. 78. 78 Kodak had been the leader in camera and film technology for many decades, especially in the mass market. In 1976 Kodak had invented the digital camera. That year, Kodak had a 90% market share for photographic film in the US. Finkelstein, R. (n.d.). Management of Technology Chapter 1: Introduction, presentation based on: Customized Management of Technology by Tarek Khalil (With Additional Information By R. Finkelstein), p. 95, http://www.robotictechnologyinc.com/images/upload/file/Presentation%20Technology%20Management3.pdf, last accessed Aug 14, 2017. See also http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/9024539/Kodak-130-years-of-history.html and https://www.photosecrets.com/the-rise-and-fall-of-kodak, last accessed Oct 15, 2017. The case of Kodak In 1996 it had a $28 billion market cap and 140,000 employees. That year, it was the 5th most valuable brand in the world In 2012 it filed for bankruptcy, put out of business by the very technology they had invented. Now Kodak is following in digital photography
  79. 79. 79 Disruptive Technologies - Kodak Diamandis, P.H. (n.d.).Lessons from Kodak, http://www.diamandis.com/blog/lessons-from- kodak?utm_content=buffer84fe6&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer, last accessed June 14, 2016.
  80. 80. 80 Disruptive Technologies - Kodak Photo: The Economist, from: Boon, W. (2016). Shell’s looming Kodak moment - How the trend towards renewable energy disrupts Shell’s core business and why the company should quickly reinvent itself, http://definingcreativity.com/shells-looming-kodak-moment/, last accessed Oct 15, 2017.
  81. 81. 81 What happened? Kodak was married to the “paper and chemicals” (film development) business, their most profitable division, while the R&D on digital cameras was a cost center. They saw the digital world coming on, but were convinced that digital cameras would not have traction outside of the professional market. Diamandis, P.H. (n.d.).Lessons from Kodak, http://www.diamandis.com/blog/lessons-from- kodak?utm_content=buffer84fe6&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer, last accessed June 14, 2016. Disruptive Technologies - Kodak
  82. 82. 82 The price of a pinball machine: $7,500 Source: Downes, L. and Nunes, P.F. (2013). Big Bang Disruption, Harvard Business Review, March, pp. 44-56. Disruptive Technologies - Pinball machines
  83. 83. 83Extracted from: Whirlwind Pinball Williams Gameplay video 1990 Arcade, https://www.youtube.com/watch?v=hb-HoYSb9FY, Uploaded to YouTube on Aug 22, 2009, last accessed on April 29, 2014. 0:33 Disruptive Technologies - Pinball machines
  84. 84. 84 The price of a PlayStation (supporting hundreds of games): $299 Source: Downes, L. and Nunes, P.F. (2013). Big Bang Disruption, Harvard Business Review, March, pp. 44-56. Disruptive Technologies - Pinball machines
  85. 85. 85 Disruptive Technologies 1993 1994
  86. 86. 86 Disruptive Technologies Pew Research Center’s Internet & American Life Mobile Survey, March 15-April 3, 2012 (N=2,254 respondents age 18 or older) and Pew Research Center’s Internet & American Life Project Surveys, March 2000-August 2011. chba 34% 41% 38% 37% 30% 28% 23% 15% 10% 7% 5% 3% 3% Jun 2000 Apr 2001 Mar 2002 Mar 2003 Apr 2004 Mar 2005 Mar 2006 Mar 2007 Apr 2008 Apr 2009 May 2010 Aug 2011 Apr 2012 0 10% 20% 30% 40% 50% 60% 70% 80% Dial-Up 34% 41% 38% 37% 30% 28% 23% 15% 10% 7% 5% 3% 3% 3% 6% 11% 16% 24% 33% 42% 47% 55% 63% 66% 62% 66% Jun 2000 Apr 2001 Mar 2002 Mar 2003 Apr 2004 Mar 2005 Mar 2006 Mar 2007 Apr 2008 Apr 2009 May 2010 Aug 2011 Apr 2012 0 10% 20% 30% 40% 50% 60% 70% 80% Braodband Dial-Up Broadband and dial-up adoption (2000-2012)
  87. 87. 87 A disruptive innovation creates a new market. It eventually disrupts an existing market, typically over a few years or even decades. The term is used in business and technology literature to describe innovations that improve a product or service in ways that the market does not expect. Sources: Wikipedia (2013). Disruptive innovation, https://en.wikipedia.org/wiki/Disruptive_innovation, last accessed June 23,2013 and Zwilling, M. (2013). Startups Should be Wary of Disruptive Technologies, Forbes, http://www.forbes.com/sites/martinzwilling/2013/05/08/startups-should-be-wary-of-disruptive-technologies/, last accessed June 23, 2013. A disruptive innovation creates a new market. It eventually disrupts an existing market, typically over a few years or even decades. The term is used in business and technology literature to describe innovations that improve a product or service in ways that the market does not expect. In contrast to disruptive innovation, a sustaining innovation does not create new markets but rather only evolves existing ones with better value. Sustaining innovations may be either “discontinuous” (i.e., “transformational” or “revolutionary”) or “continuous” (i.e., “evolutionary”). Disruptive Technologies - Definitions
  88. 88. 88https://www.wired.com/2016/03/nikes-back-future-self-lacing-shoe-hyperadapt-1-0-finally/ Disruptive Technologies – An example of a sustaining innovation
  89. 89. 89 In 2006, Nike, the leader in running shoes market in the U.S., teamed up with Apple to launch Nike+: a digital sports kit comprising a sensor that attaches to the runner’s shoe and a wireless receiver that connects to his/her iPod. Disruptive Technologies – An example of a sustaining innovation
  90. 90. 90 Disruptive Technologies – An example of a sustaining innovation In 2006, Nike, the leader in running shoes market in the U.S., teamed up with Apple to launch Nike+: a digital sports kit comprising a sensor that attaches to the runner’s shoe and a wireless receiver that connects to his/her iPod. Ofek, E. and Wathieu, L. (2010).Are You Ignoring Trends That Could Shake Up Your Business? Harvard Business Review, July- August, https://hbr.org/2010/07/are-you-ignoring-trends-that-could-shake-up-your-business, last accessed Mar 12, 2017.
  91. 91. 91 As the runner jogs and listens to her favorite music, the sensor tracks her running speed and distance and the calories she burned, and transmits that information to the iPod in real time. Ofek, E. and Wathieu, L. (2010).Are You Ignoring Trends That Could Shake Up Your Business? Harvard Business Review, July- August, https://hbr.org/2010/07/are-you-ignoring-trends-that-could-shake-up-your-business, last accessed Mar 12, 2017. As the runner jogs and listens to her favorite music, the sensor tracks her running speed and distance and the calories she burned, and transmits that information to the iPod in real time. Back at the computer, the runner can upload her data to a Web site (nikeplus.com), which stores her information and provides her with a user-friendly interface that lets her track her progress. Disruptive Technologies – An example of a sustaining innovation
  92. 92. 92 In addition, the website links to social networks like Facebook and Twitter so that runners can find and form groups of runners at their level who are interested in sharing challenges and performance information. Disruptive Technologies – An example of a sustaining innovation For a Nike+ customer, the Nike brand is no longer about just the product attached to his or her feet; it is about the total exercise experience, including the community. By combining Nike’s original value proposition for amateur athletes with one for digital consumers, the Nike+ sports kit and web interface has moved the company from a focus on athletic apparel to a new plane of engagement with its customers. Ofek, E. and Wathieu, L. (2010).Are You Ignoring Trends That Could Shake Up Your Business? Harvard Business Review, July- August, https://hbr.org/2010/07/are-you-ignoring-trends-that-could-shake-up-your-business, last accessed Mar 12, 2017.
  93. 93. 93 Disruptive or sustaining innovation? Disruptive Technologies - Definitions Source: http://forum.xcitefun.net/worlds-first-virtual-shopping-store-korea-t74128.html, last accessed on Apr. 25, 2012. All the shelves are in fact LCD Screens. Consumers choose their desired items by touching LCD screens All the shelves are in fact LCD Screens. Consumers choose their desired items by touching LCD screens and checkout at the counter in the end to have all their ordered stuff packed in bags.
  94. 94. 94Source: http://forum.xcitefun.net/worlds-first-virtual-shopping-store-korea-t74128.html, last accessed on Apr. 25, 2012. Disruptive Technologies - Definitions
  95. 95. 95 2:24 Disruptive Technologies - Definitions
  96. 96. 96 File: Amazon GO - le supermarché sans caisses 01:49Melville, A. (Jan 20, 2017). Amazon Go Is About Payments, Not Grocery, http://www.forbes.com/sites/groupthink/2017/01/20/amazon-go-is-about-payments-not-grocery/#5cc9e9c9498a, last accessed Feb 19, 2017. Disruptive Technologies - Definitions
  97. 97. 97YouTube (2016). This automatic shopping basket could revolutionize grocery shopping, https://www.youtube.com/watch?v=s- IvQ16T74I, last accessed Mar 11, 2017. 0:50 Disruptive Technologies - Definitions
  98. 98. 98 Disrupted market Innovation 8" floppy disk drive Disrupted Markets
  99. 99. 99 Disrupted market Innovation 8" floppy disk drive 5.25" floppy disk drive Disrupted Markets
  100. 100. 100 Disrupted market Innovation 8" floppy disk drive 5.25" floppy disk drive 5.25" floppy disk drive Disrupted Markets
  101. 101. 101 Disrupted market Innovation 8" floppy disk drive 5.25" floppy disk drive 5.25" floppy disk drive 3.5" floppy disk drive Disrupted Markets
  102. 102. 102 Disrupted market Innovation 8" floppy disk drive 5.25" floppy disk drive 5.25" floppy disk drive 3.5" floppy disk drive 3.5" floppy disk drive Bernoulli drive and Zip drive Disrupted Markets
  103. 103. 103 Disrupted market Innovation 8" floppy disk drive 5.25" floppy disk drive 5.25" floppy disk drive 3.5" floppy disk drive 3.5" floppy disk drive Bernoulli drive and Zip drive Disrupted Markets
  104. 104. 104 Disrupted market Innovation 8" floppy disk drive 5.25" floppy disk drive 5.25" floppy disk drive 3.5" floppy disk drive 3.5" floppy disk drive Bernoulli drive and Zip drive Bernoulli drive and Zip drive CDs and USB flash drives Disrupted Markets
  105. 105. 105 Disrupted market Innovation 8" floppy disk drive 5.25" floppy disk drive 5.25" floppy disk drive 3.5" floppy disk drive 3.5" floppy disk drive Bernoulli drive and Zip drive Bernoulli drive and Zip drive CDs and USB flash drives Disrupted Markets
  106. 106. 106 Disrupted market Innovation 8" floppy disk drive 5.25" floppy disk drive 5.25" floppy disk drive 3.5" floppy disk drive 3.5" floppy disk drive Bernoulli drive and Zip drive Bernoulli drive and Zip drive CDs and USB flash drives USB flash drives Disrupted Markets
  107. 107. 107 Disrupted market Innovation 8" floppy disk drive 5.25" floppy disk drive 5.25" floppy disk drive 3.5" floppy disk drive 3.5" floppy disk drive Bernoulli drive and Zip drive Bernoulli drive and Zip drive CDs and USB flash drives USB flash drives Cloud computing Disrupted Markets
  108. 108. 108 Disrupted market Innovation 8" floppy disk drive 5.25" floppy disk drive 5.25" floppy disk drive 3.5" floppy disk drive 3.5" floppy disk drive Bernoulli drive and Zip drive Bernoulli drive and Zip drive CDs and USB flash drives USB flash drives Cloud computing Postal mail (snail) Disrupted Markets
  109. 109. 109 Disrupted market Innovation 8" floppy disk drive 5.25" floppy disk drive 5.25" floppy disk drive 3.5" floppy disk drive 3.5" floppy disk drive Bernoulli drive and Zip drive Bernoulli drive and Zip drive CDs and USB flash drives USB flash drives Cloud computing Postal mail (snail) Email Disrupted Markets
  110. 110. 110 Disrupted market Innovation Telegraphy Disrupted Markets
  111. 111. 111 Disrupted market Innovation Telegraphy Telephone Disrupted Markets
  112. 112. 112 Disrupted market Innovation Telegraphy Telephone CRT Disrupted Markets
  113. 113. 113 Disrupted market Innovation Telegraphy Telephones CRT LCD Traditional encyclopedias Wikipedia Disrupted Markets
  114. 114. 114 Disrupted market Innovation Telegraphy Telephones CRT LCD Traditional encyclopedias Wikipedia Disrupted Markets
  115. 115. 115 An ad-supported version of the game Angry Birds was downloaded over a million times in the first 24h it was made available on Android devices. Source: Downes, L. and Nunes, P.F. (2013). Big Bang Disruption, Harvard Business Review, March, pp. 44-56. See also: http://space.angrybirds.com/launch/ An ad-supported version of the game Angry Birds was downloaded over a million times in the first 24h it was made available on Android devices. Seven months later the game had been downloaded more than 200 million times! Example: Angry Birds
  116. 116. 116 2:00 Example: Angry Birds
  117. 117. 117 Example: Angry Birds
  118. 118. 118Christensen, C.M. and Raynor, M.E. (2003). The Innovator's Solution: Creating and Sustaining Successful Growth. Boston: Harvard Business School Press. The Innovator’s Dilemma New competitors almost always win. The Innovators Dilemma identifies 2 distinct categories - sustaining and disruptive - based on the circumstances of innovation. ln disruptive circumstances - when the challenge is to commercialize a simpler more convenient product for less money and appeals to a new or unattractive customer set - the entrants are likely to beat the incumbent.
  119. 119. 119Christensen, C.M. and Raynor, M.E. (2003). The Innovator's Solution: Creating and Sustaining Successful Growth. Boston: Harvard Business School Press. The Innovator’s Dilemma ln sustaining circumstances ... when the race entails making better products that can be sold for more money to attractive customers - we found that incumbents almost always prevail. This is the phenomenon that so frequently defeats successful companies. It implies that the best way for upstarts to attack established competitors is to disrupt them. The Innovators Dilemma identifies 2 distinct categories - sustaining and disruptive - based on the circumstances of innovation. ln disruptive circumstances - when the challenge is to commercialize a simpler more convenient product for less money and appeals to a new or unattractive customer set - the entrants are likely to beat the incumbent.
  120. 120. 120 Performance Time The Innovator’s Dilemma
  121. 121. 121 The Innovator’s Dilemma: The example of Edge
  122. 122. 122 The Innovator’s Dilemma: The example of Edge
  123. 123. 123 Netscape Internet Explorer Lucas, H.C. (1999). Information Technology and the Productivity Paradox – Assessing the Value of Investing in IT, New York Oxford, Oxford University Press, pp. 7-8. The IT Industry: The Browsers War
  124. 124. 124 The IT Industry: The Browsers War
  125. 125. 125 The IT Industry: The Browsers War
  126. 126. 126 The IT Industry: The Browsers War
  127. 127. 127 Reportedly said in 1899 by Charles H. Duell, the Commissioner of US patent office in 1899. “Everything that can be invented has been invented.” Conclusion
  128. 128. 128 T T H H A A N N K K S SSong: Extracted from the song 141120 TK music sn04.-27510, by Artist: Pleasure Park Music - Licensed by AdRev for Rights Holder (on behalf of Pleasure Park Music), https://soundcloud.com/zoxfox87/141120-tk-music-sn05-1, last accessed July 27, 2018.

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